Antitrust Implications of COVID Surcharges

While it may seem justified for businesses facing increased costs in these trying COVID-19 pandemic times to add “COVID surcharges” to ensure they can keep their doors open, businesses and their corporate counsel should be aware that such surcharges can raise serious competition concerns and need to be carefully navigated.

Court Addresses Arbitration Provision in Connection With Post-Petition Debtor Contracts

In Woodbridge Wind-Down Entity v. Monsoon Blockchain Storage, the U.S. Bankruptcy Court for the District of Delaware (the “Court”) addressed the enforceability of an arbitration provision in connection with a post-petition contract entered into by the debtors and a non-debtor counterparty. The Court first concluded that Paragraph 22(B) did provide for the arbitration of disputes under the APA. However, the Court then found that the Addendum represented the parties’ actual intent and that its language controlled. In light of the Addendum’s unambiguous language, the Court concluded that the parties did not agree to arbitrate claims under the APA.

Publication of the Model Business Corporation Act Annotated (5th edition)

The 5th edition of the MBCAA of course contains the full text of the Model Act, reflecting all amendments and Official Comments through July 1, 2020, including the substantial revisions effected by the 2016 revision of the Model Act, and more recent additions such as the provisions authorizing virtual-only shareholder meetings and public benefit corporations. Extensive additional resources, however, distinguish the newly published MBCAA from other published versions of the Act and, indeed, from other corporate law treatises.

SEC Expands the Definition of Accredited Investor

SEC rules governing accredited investors are designed to protect individual investors from risks that could result from the lack of regulatory oversight associated with unregistered private securities offerings. By expanding the definition of “accredited investor,” the SEC has provided more investors with the opportunity to access alternative investments and given companies, private-equity firms, and hedge funds access to a larger pool of investors.

SEC Adopts Amendments to Regulation S-K Items 101, 103, and 105

Under the rule amendments, the SEC significantly revised public company business disclosure rules for the first time in more than 30 years. The amendments were crafted from a proposed rule released in August 2019 that was part of a comprehensive review by the SEC of the disclosure requirements per a study mandated by the JOBS Act.

IRS Issues Proposed Regulations for Tax on Nonprofit Executive Compensation

The Internal Revenue Service has issued proposed regulations describing the rules regarding the 21 percent excise tax on compensation over $1 million and excess parachute payments paid by tax-exempt organizations to certain covered employees. The proposed regulations affect certain tax-exempt organizations, government entities, and certain entities that are treated as related to those organizations.